03/22/2002 09:38 AM Senate FIN

                                                                                                                                
     SENATE JOINT RESOLUTION NO. 38                                                                                             
     Proposing amendments to the Constitution of the State of                                                                   
     Alaska    relating    to   information    regarding    proposed                                                            
     expenditures.                                                                                                              
                                                                                                                                
                                                                                                                                
This  was the  first  hearing  for  this resolution  in  the  Senate                                                            
Finance Committee.                                                                                                              
                                                                                                                                
Co-Chair  Kelly  noted  this  constitutional  amendment  allows  the                                                            
previous bill, HB 349, to be implemented.                                                                                       
                                                                                                                                
Representative   Dyson  relayed  his  experiences   serving  on  the                                                            
Anchorage  Assembly where  a similar  prioritization  process  is in                                                            
use.  He noted  this  process  was never  codified  in  law, but  is                                                            
nonetheless effective and had been "greatly refined".                                                                           
                                                                                                                                
Representative  Dyson shared  discussions on  this legislation  with                                                            
Annalee McConnell,  former  leader of the  budget department  in the                                                            
Municipality  of  Anchorage  and current  director  of  the  state's                                                            
Office  of Management  and Budget.  He noted they  talked about  the                                                            
process employed  in the Municipality,  whereby the budget  analysts                                                            
were required  to calculate  the "exact cost  of every component  of                                                            
every  output  of every  department."  He  relayed  Ms. McConnell's                                                             
concerns  that these  efforts were  wasted for  those programs  that                                                            
were of either  very high priority, and would not  be eliminated, or                                                            
low priority and would  not receive funding. He countered there is a                                                            
benefit for the legislative  body to know the cost of all operations                                                            
regardless   of  whether   those  functions   were  considered   for                                                            
reductions.                                                                                                                     
                                                                                                                                
Senator Ward  asked how the items  in the Municipality of  Anchorage                                                            
budget are prioritized.                                                                                                         
                                                                                                                                
Representative  Dyson  replied  that the  services  and outputs  are                                                            
ranked from most valuable to least valuable by the departments.                                                                 
                                                                                                                                
Senator Olson  asked about  transferring this  method from  a single                                                            
municipality to the state, which has more complexity.                                                                           
                                                                                                                                
Representative  Dyson  replied   this  principal  is  universal,  is                                                            
practiced   by  individuals   and  businesses,   and  is   therefore                                                            
reasonable to expect of the state.                                                                                              
                                                                                                                                
Representative Dyson noted  the municipality system identifies those                                                            
expenditures   that   are  statutory   required,   those  that   are                                                            
constitutionally  mandated,  and those  that are  supported by  user                                                            
fees.  He suggested  the state  employ  this method  as well.  These                                                            
functions, he stressed,  would become higher priorities. He stressed                                                            
his  intention  is not  to  "take  a sledgehammer  or  meat  cleaver                                                            
approach" but rather one that is thoughtful and rational.                                                                       
                                                                                                                                
Senator  Austerman asked  what timeframe  would be  provided to  the                                                            
Administration   to  allow   this  prioritization   process   to  be                                                            
undertaken within the normal budget cycle.                                                                                      
                                                                                                                                
Co-Chair Kelly  responded this constitutional amendment  only allows                                                            
the  Legislature  the authority  to  require the  Administration  to                                                            
perform  prioritization.  He  stated  that  statutes  would  be  the                                                            
appropriate  venue to provide  for an implementation  timeframe.  He                                                            
anticipated  statutory  changes would  be necessary  to "refine  the                                                            
process".                                                                                                                       
                                                                                                                                
Senator Green offered a  motion to report SJR 38 from Committee with                                                            
a $1,500 fiscal  note from the Office  of the Governor, Division  of                                                            
Elections.                                                                                                                      
                                                                                                                                
The bill MOVED from Committee without objection.